Abstract

US demand to grow 5% annually through 2016

Demand for flame retardants in the US is expected to grow 4.6 percent per year
to 938 million pounds in 2016, a significant rebound as the industry benefits
from an improving economy and a turnaround in key markets like building
construction and motor vehicles. Construction related applications will
provide the biggest impetus to growth and continue to account for the greatest
share of sales. Other factors increasing demand include stringent fire codes
and flammability requirements. Environmental issues will present mixed
results, with concern over the potentially deleterious health effects of
halogenated flame retardants slowing growth for those compounds, especially in
consumer goods, but also offering opportunities for safer alternatives.

Recession of 2007-2009 affected most flame retardant markets

The mortgage crisis and ensuing economic downturn resulted in a decline in
flame retardant demand beginning in 2007 as a glut in the housing market led
to a sharp downturn in residential construction. By 2009 the recession began
to impact the construction of offices and commercial spaces. These trends
reduced the need for flame retardants used mostly in construction, with boron
(used in insulation) and chlorinated compounds (used in PVC) seeing the
steepest declines. Markets closely associated with construction, such as wire
and cable, upholstery, carpets and rugs, and other home furnishings,
experienced similar losses. Outside the construction industry, flame retardant
demand in motor vehicles and electronics also felt the severity of the
recession.

Construction markets to see sharpest advances thru 2016

With the housing market bottoming out and showing signs of recovery, demand
for flame retardants will also begin to improve. Flame retardants utilized in
construction applications will see the sharpest improvements given that
insulation, roofing, flooring, building boards, and other structural materials
that all require treatment. Boron and phosphorusbased flame retardants will
expand at the fastest rates. Brominated compounds will benefit from use in
polystyrene and polyurethane insulation.

Outside of the construction market, a number of other uses for flame
retardants will experience improved market prospects, including construction
associated industries like carpeting, curtains, and other home furnishings.
Wire and cable applications for both communications and power transmission
will expand, along with new construction. Use in motor vehicle applications
will post strong improvement along with the rebound in US motor vehicle
output. The increasing use of plastics in vehicles provides additional
opportunities. In contrast, the outlook for the US electronics industry is
less benign and electronics applications will be the slowest growing outlets
for flame retardant demand.

Non-halogenated types to benefit from safety concerns

Alumina trihydrate is by far the most important type of flame retardant used
in the US market in volume terms, with 46 percent of total volume sales.
However, the higher-value brominated flame retardants account for the greatest
share of market value. Halogenated types will register subpar advances due to
health and safety concerns, although this same issue will provide
opportunities for a number of non-halogenated alternatives.